Real estate forum to be set up
Swinney agrees new plan to boost ‘joined up policy’
Scottish Property Federation chairman Chris Stewart said Deputy First Minister John Swinney had agreed to the creation of a Real Estate Forum to bring the industry and policy makers together.
Mr Stewart (pictured) believes this will help Scotland attract foreign capital and achieve its economic ambitions.
Much of the property development taking place in Scotland depends on money from overseas institutions and developers say it is vial that the conditions – such as planning laws and levels of tax – are appropriate to ensure this flow of capital continues.
At the SPF’s ninth annual conference, Attracting Global Capital, Mr Stewart said: “One of the key issues facing our industry is that property falls across a number of government portfolios, which can be a barrier for truly joined up policy.
“A new real estate forum that brings together the finance and economy briefs, alongside communities, planning, housing, heritage and the environment will be of huge benefit.
“It will allow government and industry a direct means of communication; one that ensures that policy decisions are made with an informed view of the markets and in line with the country’s ambition.
“This forum will also allow the property sector to realise its true potential for providing additional jobs and adding more value to the economy.”
He told more than 250 delegates meeting at Dynamic Earth: “Mr Swinney has confirmed his support for the forum.”
Earlier he noted a survey from Lambert Smith Hampton which calculated an 11% slide in investment in commercial property in Scotland in 2015 compared to a 23% increase in the rest of the U.K.
“External capital looks unemotionally on Scotland. It is deterred by political and policy uncertainty; it can be fickle and we cannot afford to be left behind,” he said.
“The property sector in Scotland has had a long road to climb since the crash of 2008 massively reduced both output and the industry’s capacity to recover quickly. We are now making inroads, but the sector has been radically changed by the experience, partly as a result of having to start again, and partly as a result of the vastly different economic context we sit within, both at home and abroad.
“In Scotland, our sector is not made up of large real estate businesses. If it ever was, the financial crisis put an end to that. What Scotland does have is a property industry made up of young entrepreneurial businesses; individual experts; good, solid, but small to medium sized, independent companies, employing and indirectly supporting nearly 134,000 jobs in total and earning £6bn GVA for the economy.
“Unfortunately, while the economic context has changed, there is little evidence that policymakers have acknowledged or really understood these changes. All too often the property sector is treated simply as a source of tax revenue, which shows a lack of understanding of its fragility. It should be considered a spur for economic growth, a key driver of construction jobs, a problem solver and the mechanism by which we can attract much needed inward investment.”
He added: “Game-changing funding will only come if we work closely with Government and our cities to make Scotland an attractive destination for inward investment.
“We also need a vibrant, robust and sustainable sector, of well-capitalised real estate companies who will be credible partners for investors keen to place capital in our market. We should be harnessing and expanding the expertise, ambition and talent that exists.
“So, Scotland must provide an “open door” to global capital with a policy framework for it to come to, and stay in Scotland. It is within government’s authority and responsibility to ensure that bad practice and inefficiency is eradicated and that we offer a secure and stable destination for global capital.
“It’s time to change the debate between the property industry and government.”
David Melhuish, director of the SPF, said: “We believe that with the right impetus, and a strong collaborative approach, the sector has the potential to deliver sustainable growth, ultimately restoring job levels and economic input back to pre-2008 figures.”